Correlation Between NYSE Composite and Local Bounti
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Local Bounti at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NYSE Composite and Local Bounti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Local Bounti Corp, you can compare the effects of market volatilities on NYSE Composite and Local Bounti and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NYSE Composite with a short position of Local Bounti. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Local Bounti.
Diversification Opportunities for NYSE Composite and Local Bounti
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Local is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Local Bounti Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Local Bounti Corp and NYSE Composite is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NYSE Composite are associated (or correlated) with Local Bounti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Local Bounti Corp has no effect on the direction of NYSE Composite i.e., NYSE Composite and Local Bounti go up and down completely randomly.
Pair Corralation between NYSE Composite and Local Bounti
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.47 times less return on investment than Local Bounti. But when comparing it to its historical volatility, NYSE Composite is 14.69 times less risky than Local Bounti. It trades about 0.05 of its potential returns per unit of risk. Local Bounti Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 252.00 in Local Bounti Corp on October 26, 2024 and sell it today you would lose (38.00) from holding Local Bounti Corp or give up 15.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Local Bounti Corp
Performance |
| Timeline |
NYSE Composite and Local Bounti Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Local Bounti Corp
Pair trading matchups for Local Bounti
Pair Trading with NYSE Composite and Local Bounti
The main advantage of trading using opposite NYSE Composite and Local Bounti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Local Bounti can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Local Bounti will offset losses from the drop in Local Bounti's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. Proficient Auto Logistics, | NYSE Composite vs. Hafnia Limited | NYSE Composite vs. Arm Holdings plc |
| Local Bounti vs. Fresh Del Monte | Local Bounti vs. Alico Inc | Local Bounti vs. SW Seed Company | Local Bounti vs. Adecoagro SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.
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